SaabsUnited Talks Exclusively to North Street Capital

Almost three weeks ago, Saab held their creditors meeting in Vänersborg, Sweden. Only days before, Swedish Automobile (Swan) negotiated for the complete sale of Saab Automobile to the Chinese consortium of Youngman and Pang Da. What seemed at the time like a savior for the company to tired suppliers, dealers, and the Saab community unraveled within days once GM lodged their unwillingness to license the technology that underpins current Saab models, in addition to ceasing 9-4X production.

While all of this has unfolded, North Street Capital (NSC) was working behind the scenes to purchase Spyker from Swan. At times they’ve been prepared to offer a more substantial influx of cash through bridge loans to ensure Saab’s creditors be paid, though these deals were put aside by Swan to focus on a Chinese deal. North Street is aware of speculation regarding their involvement in the sale of Saab. I spoke with Alex Mascioli, Managing Partner at North Street, who wanted to clarify their position in the current situation.

“The great amount of uncertainty which surrounds the sale of Saab has taken its toll on the company. We stand ready to help in any way to ease the sale of Saab Automobile,” he told me from his office in Greenwich, CT.

We discussed how NSC thinks they can turn the company around and restore confidence in the brand. Above all else, Mascioli expressed his concern that Saab remain rooted in Sweden, and that their business plan is sound. “We’re especially mindful of the strain the staff, dealers, and suppliers feel and hope that a deal can be reached as soon as possible,” Mascioli explained. “We really feel for the stakeholders, and watching the situation unravel while solutions are available has been painful.”

A lot has been made of the priorities of bidders looking to purchase Saab and their motivation. North Street may not be experienced in running a car company, but they’re experts in understanding undervalued assets.”Despite its liabilities, Saab still can have a bright future in Sweden. It has one of the best production facilities in Europe, a strong portfolio of current and future products, and is well positioned as the marketplace focuses on right-sized engines and fuel economy. As the Chinese bidders know, the brand’s uniquely Scandinavian heritage makes it an extremely valuable brand and product. We would like to ensure that the company is able to leverage these strengths so that its future in Sweden is secure.”

These statements take on extra significance when viewed in light of GM’s concern about Chinese ownership. It’s clear that North Street’s position not as an OEM but as a financier, has no interest in using GM’s technology for anything other their implementation in Saab’s turnaround. They effectively have an interest in maintaining a positive relationship with GM and all of Saab’s supplier partners to ensure that they will recoup and profit from their initial investment.

At the same time, even though NSC has worked to put together their own deal with Swan, they understand Guy Lofalk and others’ opinions that the Chinese money and market bring a long term stability that Saab desperately needs.

“We’re aware of GM’s concern with 100% change of ownership, and we’re standing by ready to assist in any capacity to help ease their concerns,” Mascioli said. He believes that North Street could add an appropriate balance in a coordinated joint deal to satisfy conditions and reach an agreeable deal with GM and the other stakeholders.

“Each day that passes, the opportunity for a solution dims, and we urge all parties to act quickly in Saab’s best interests. We’re committed to finding a solution that will be agreeable to all parties, so that Saab can pay their creditors, dealers, and staff immediately and get back to building cars as soon as possible,” Mascioli concluded.

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SaabsUnited does not have a particular favorite bidder or outcome in this process. Our main desire is that Saab finds a solution which ensures its long term survival and success, building cars in Sweden for global consumption. We have no allegiance to any particular entity, only the cars themselves. We’re eager to see a successful deal reached as soon as possible that guarantees that the company return to building cars in Trollhättan for years and years to come.

Grumpy
Member
4 years 10 months ago

Perhaps the NSC involvement, or at least potential involvement, could be the beginning of a North American solution to Saab’s woes.

The issue with China is not sales but manufacturing. If A US consortium would snap up Saab they could still form a strategic partnership with Pang Da until such a time that GM’s influence has been reduced to insignificant. They could rebuild the brand name, restart production and go from there, sure they would need a lot of money…

Sorry just dreaming a bit..

RS
Member
4 years 10 months ago

I agree. Maybe NSC could take Youngman’s place at the table for the next few years, until the GM IP issues are resolved. They can still start building the factory and begin engineering the new 9-1, 9-6, 9-7 with Saab even though they’re not the officially owners.

How about this: PD 40%, SWAN 30% and NSC 30%. YM buys the preferred from GM for the same price they were offered to VA?
Would give them a right to veto any possible ownership changes that could jeopardize their position especially with big investments in future models.

Thylmuc
Member
4 years 10 months ago
I reckon that there are two sorts of potential buyers (regardless of GM’s interference): 1. A company with a reputation that will immediately restore trust in the Saab, and is willing to invest a few hundred million Euros (purchase from SWAN, debts to suppliers, restart production, marketing, finish developing of 9-3) over the next 2 years 2. A company or consortium that is interested to re-use Saab technology and expertise for further undertakings, and is willing to invest even more (all of the above, plus many more marketing and several years of proof that they will remain committed, throughout which… Read more »
Saab232
Member
4 years 10 months ago
I completely agree with you. However I think what the whole point of this interview points out is that there’s a huge stumbling block on the road to point 2, GM. Without a sufficient third party that is unwilling to move or allow their technology to move to Chinese facilities or the proper safeguards, I don’t think GM will agree. It appears NSC could be that safeguard, and if they’re willing to put their own money into the deal I think they’re just as viable as anyone else willing to bet on Saab right now. NSC has all the right… Read more »
Troels, Denmark
Member
4 years 10 months ago

I just hope that there will be found a solution for SAAB VERY soon…
– and I hope GM will not just find another excuse to kill Saab …

maanders
Member
4 years 10 months ago

I’m not sure NSC would be given the chance to be sole owner by the administrator, but it sounds like they have enough capital to get a deal done or else they wouldn’t be allowed at the table. Plus they are ready to be part of a deal of joint ownership in order to get the percentage of Chinese ownership to a point that GM will accept. That may be the only solution at this point.

zippy
Member
4 years 10 months ago

I am just glad to see that Saab is still with us and hope that this whole situation sorts itself out.

JasonPowell
Member
4 years 10 months ago

I’m with you there zippy

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